ICC Comments on OECD public consultation document on the review of Country-by-Country Reporting (BEPS Action 13)
ICC Comments on OECD public consultation on the review of Country-by-Country Reporting (BEPS Action 13), as part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS.
ICC welcomed the opportunity to provide comments on the Organization for Economic Co-operation and Development (OECD)’s public consultation on the review of Country-by-Country Reporting (BEPS Action 13) as part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS to address the issues concerning the use of Country-by-Country (CbC) reports by tax administrations for the purposes of a high level transfer pricing risk assessment, the assessment of other BEPS-related risks and economic and statistical analysis.
Over the past year, there has been valuable insight regarding the implementation of the BEPS Action 13 minimum standard on CBC reporting. Action 13 has had a more direct impact on the obligations of multinational enterprises (MNEs), particularly, as it created a new reporting form that was rapidly incorporated in local legislations with immediate effect.
From a business perspective, ICC notes that preparation for appropriate completion of the CbC report has required internal investment by MNEs in terms of additional time, resources and systems. It is ICC’s view that given the extent of investment and effort to understand and standardise the procedures for the CbC report requirements, it would be timely to make the best use of the results gained to provide standardised annual information as defined by the OECD.
ICC suggests that any changes in definitions and scope should be carefully considered and justified, taking into account the additional costs imposed on compliant taxpayers. In addition, ICC believes that changes in the CbC report governing rules or its definitions would undermine tax certainty which is essential for the business community in reducing complexity and cost, as well as increasing confidence in investments for economic growth. Tax certainty is also a central consideration in the work of the OECD.
ICC suggests that changes to the CbC report should be deferred pending the outcome of the negotiations on the tax challenges of the digitalised economy. ICC highlighted that specifically for tax authorities, further efforts should focus on providing clearer guidance on the existing definitions and information reported in order to ensure that consistent information is provide. For this to be successful and to reduce potential disputes, information exchange should be enhanced.
ICC advocates for a consistent global tax system, founded on the premise that stability, certainty and consistency in global tax principles are essential for business and will foster cross-border trade and investment.